Tuesday, April 14

Coles brand now feeling stale

My letter as per below appeared today in the AFR alongside a large cartoon depicting the giant Coles supermarket displaying two large sale bins for shoppers with signage" Suppliers freshly squeezed" and another headed "Furphies baked today".In the article "$2.5 million fine in "fresh bread" suit"(AFR, April 11-12) Marianna Papadakis reports that ACCC's Rod Sims says Coles tried to portray its products as that of a hot bread shop and is pushing for stiffer fines to apply in future for false advertising.Of course, a lot can hinge on what you don't say, as the Federal Court fine was imposed on Coles for promoting products advertised as "Baked Today, Sold Today" and in some cases "Freshly Baked In-Store", which gave that distinct impression of a hot bread shop. Consumers were unaware the products were re-baked from partially baked and frozen off site supplied products, in a practice known as "finishing" in the Coles on site bakeries.For Wesfarmers their Coles brand must now be looking increasingly tarnished, as the latest penalty for false advertising is on top of a reported requirement for Coles to enter into $26 million in undertakings with the ACCC covering up to 200 suppliers, in addition to fines of $10 million for "serious, deliberate and repeated" misconduct towards suppliers.But when the matter first arose Cole's response was they were engaging in competitive sourcing of product for the benefit of lower prices for the consumer. They were, but it appears most of the benefit stayed in house to improve returns along with the strong-arm tactics which have inflicted untold misery on many of its suppliers.

5 comments:

What disturbs me about this obviously wealthy business is that it seems a perfect example of the intense need to achieve predominance where such is unnecessary. How can greed and undercutting the competition possibly be good for the people involved - and that they're dealing with the 'staff of life' makes it all the more sad.

Thanks for another excellent letter to the editor. Best wishes, Lindsay.

That's terrible I'm glad to hear they have been fined. I remember when I lived in Darwin and there were mango trees everywhere.. mangos were literally covering the foot paths.. I learned that the mangos in coles were from Qld and has been "stickered" (that is just a simple sticker put on the fruit) at a processing plant in NSW. A lot of food miles and waste when they obviously could have been sourced locally. it's better in my opinion to buy local and season from smaller companies where possible.

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About Me

I have worked in the roles as Company Secretary or Divisional financial executive with larger Australian based multinational companies before changing careers in favour of sales and marketing for the latter 12 years of business life.
My particular interests include corporate social responsibility, ethics and research into more sustainable business practices.
I am a fellow of CPA Australia and an Associate member of the Governance Institute of Australia which was previously called the Chartered Secretaries Australia. I am chairman of the Malawi Support group who are a small group of catholic parishioners who raise funds to support a sister parish in Malawi.